Mac Inc. is weighing a proposal to manufacture a new device that will monitor blood pressure during surgery, the expected life of this project is $5$ years. Mr$.$ Alden, the financial manager of Mac Inc, expect that the unit sales for this new device in the future five years are as follows:

$\backslash$table$[[$Year$,1,2,3,4,5],[$Unit sales,$450,000,600,000,740,000,800,000,700,000]]$

The installed cost of equipment is $$4,800,000,$ the tax law allows this equipment depreciate to zero over $8$ year using straight$-$line depreciation method. Mr$.$ Alden expects this equipment can be sold for about $$1,200,000$ at the end of the project. In addition, production of the project will require $$700,000$ in net working capital to start and additional new working capital investments each year equal to $10\%$ of the projected sales increase for the following year. Total fixed costs are $$1,600,000$ per year, variable production cost are $$13$ per unit, and the units are priced at $$20$ each. The marginal tax rate of Mac Inc. is $35\%$ and the require return on the project is $20\%.$

Required:

$.$ Calculate the net capital spending in last year. $(5$ marks$)$

$.$ Calculate the cash flow from asset for each year. $(10$ marks$)$

$.$ Calculate the net present value and Payback period of the project. $(6$ marks$)$

$.$ Should Mac Inc. accept the project? Why? $(2$ marks$)$